Meta-inventory

Abstract

In an Industry 4.0 Factory, physical entities such as humans, machines and materials are digitized into digital twins (DT) with smart IoT (Internet of Things) devices resulting in Cyber-Physical Production Systems (CPPS). Real-time data analytics builds up traceability and visibility, not only in the physical domain but also cyber space. This paper adds a new concept of cyber-physical inventory or simply meta-inventory to Industry 4.0 CPPS. In addition to physical items, their digital twins are considered as part of production inventory. Traceability and visibility enabled by digital twin can significantly reduce complexity and uncertainties (e.g. lead times and variability) while achieving resilience in case of major disturbances. The CPPS factory hedges the risks through meta-inventory without incurring cost for holding inventory digitally. After reflecting upon the developments of production inventory management corresponding to the evolutionary history of manufacturing systems to Industry 4.0, the paper presents the meta-inventory paradigm within a simple Industry 4.0 compliant supply chain. The factory, the supplier, and the transport implement a VMI (vendor-managed inventory) strategy. Two well-known basic EOQ (Economic Order Quantity) and EPQ (Economic Production Quantity or production Lot Sizing) problems are extended to demonstrate and quantify the impacts of using meta-inventory on the supply chain and the member enterprise. The analyses allow us to unfold key perspectives in more complex production and supply chain systems for further research.